|12 Months Ended|
Dec. 31, 2022
The net assets acquired in each transaction are generally recorded at their estimated acquisition-date fair values, while transaction costs associated with the acquisition are expensed as incurred. These transactions were accounted for by the acquisition method, and accordingly, the results of operations were included in the Company’s consolidated financial statements from their respective acquisition dates. Pro forma financial information is not presented, as amounts are not material to the Company’s consolidated financial statements.
Standard Farms OH
On March 15, 2021, the Company through its subsidiary Standard Farms Ohio, LLC (“Standard Farms OH”) acquired 100% of the assets of Standard Farms Ohio LLC. Standard Farms OH’s purpose-built facility utilizes CO2 extraction to produce high-quality medical cannabis products including tinctures, vape cartridges, syringes and topicals. The facility is located just outside of Cleveland, Ohio, providing ready access to the state’s 52 operating dispensaries. The Company expects to expand product offerings at Standard Farms OH to include concentrates and edibles inspired by the Company’s operations in Massachusetts and Pennsylvania. The consideration exchanged for the net assets acquired comprised the settlement of $7,550 due to the Company under the Build- Out Note and Loan Notes. See Note 10 – Loans Receivable for additional information.
The following table summarizes the allocation of consideration exchanged for the estimated fair value of tangible and identifiable intangible assets acquired and liabilities assumed:
(1)License acquired is a manufacturing production license with an indefinite life that is not subject to amortization and is tested annually for impairment.
On August 24, 2021, a subsidiary of the Company acquired 100% of the Class A membership units of Standard Farms New York (“SFNY”) which holds a 75% interest in CGSF, with the remaining interest held by Conor Green Consulting, LLC (“Conor Green”). The purpose of this acquisition is to acquire the pre-existing management service agreement CGSF has with Little Beach Harvest. The Company paid a total of $751, with $400 being paid in cash and $351 in common shares, in exchange for the acquisition of the SFNY Class A membership units.
The following table summarizes the allocation of consideration exchanged for the estimated fair value of tangible and identifiable intangible assets acquired, liabilities assumed and non-controlling interest:
Through the agreements between CGSF and Little Beach Harvest, the Company will provide management services to Little Beach Harvest for the development of facilities, including planning, design and funding of up to approximately $18,000 in capital expenditures in order to provide a fully vertical cannabis operation. The 9% debt financing the Company provides is repaid through cash flows monthly and is secured by the assets of the project. In exchange for providing management services, SFNY will receive 11.25% of Shinnecock’s gross revenue as well as 18.75% of free cash flows from all Shinnecock cannabis operations during the initial term of up to nine years. The management agreement may be extended up to additional years, pending accomplishment of certain performance-based milestones related to revenue and profitability.
The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef